Here's Why We're "Bottom Fishing" for the Best New Trades...

Get your boots and tackle box ready. It’s time to go bottom fishing…

But I must warn you– you’ll encounter some hideous creatures crawling along the murky depths of the stock market. Frankly, it’s a cesspool most traders wouldn’t get caught dead in.

But we would…

Because if you dig through the muck, you’ll unearth some compelling buys from sectors we haven’t touched in months. They were sucked down by the market’s undertow– and completely buried under popular growth stocks. But these bottom-bouncing trades are now set to make you fast, double-digit gains in a matter of weeks.

First, let’s take a look at what’s changing in the stock market right now and how it’s affecting our trading strategies.

For most of this year the stock market offered you a simple, effective strategy to defeat its choppy conditions: buy strength.

During the first and second quarters the biggest, best performing stocks stole all the thunder. If you weren’t trading red-hot biotechs or the most popular household name stocks like Netflix or Amazon, you made squat.

As I told you a couple of months ago, a choppy market sprinkled with a limited number of outperformers is a miserable environment for the average investor. If you buy an index fund and sit on your hands, your portfolio goes nowhere. You hear all this talk about record highs from the top performers every few weeks. But you’re just not seeing the results in your account.

So instead of betting on subpar stocks and index funds, we put together a lean, mean trading machine that cut the losers out of your trading portfolio. You bought strength. And you were able to book some impressive gains.

However, that’s all changing now.

Many of the big names that were propelling traders’ profits over the past nine months are stuck in the muck right now. Take a look for yourself:

Falling Supply

Over the past two months, Tesla and Apple have wandered lower, while other former high fliers such as Netflix and the S&P Biotech Index have slumped double-digits. In short, these aren’t the stocks that are propelling the market higher right now.

What we’re experiencing right now is sharp rotation into some of the stocks that a majority of investors have kicked to the curb this year. My friend Michael Batnick over at Ritholtz Wealth Management noted yesterday that the top 4 performing S&P 500 stocks on the day were down at least 40% on the year.

While former leaders continue to rest or sneak lower, sectors like metals and mining and energy are beginning to show signs that they could be bottoming out here. That’s a massive shift in market characteristics. And these are precisely the sectors you should be sifting through to find your next big trade. These could very well be the stocks that outperform the major averages over the next three months…

Sincerely,

Greg Guenthner
for The Daily Reckoning

P.S If you want to cash in on the biggest profits this market has to offer, sign up for my Rude Awakening e-letter, right here. Stop missing out. Click here now to sign up for FREE.